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Amortization Recast Gap Calculator

Loan recasts re-amortize over remaining term, often reducing monthly payments.

Original loan balance

Interest rate %

Original amortization

Years elapsed

Lump sum principal

Monthly payment reduction

$528

New monthly payment

$1,859

Old monthly payment

$2,387

How the math works

Recalculate current balance via compound interest formula, subtract lump sum, re-amortize over remaining term.

$500k loan → $452k after 5 yrs → $352k after $100k lump → $1,857/mo new vs $2,387 old = $530/mo reduction.

Editorial noteMaintained by EveryCalc - Reviewed June 2026

EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.

Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.

Learn more about our review process on the EveryCalc methodology page.

How this calculator works

What this page estimates

This Amortization Recast Gap Calculator is built to give a quick, browser-based estimate for amortization recast gap. Loan recasts re-amortize over remaining term, often reducing monthly payments. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.

Calculation approach

The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.

Example workflow

For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.

Practical checks

Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
Run a low, base, and high case when the inputs are estimates.
Check the related calculators below when the next decision depends on a different assumption.

How to interpret the amortization recast gap result

Best use

Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.

Cross-check

Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.

Watch for

Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.

This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.

Before relying on this amortization recast gap estimate

Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.

Confirm source numbers

Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.

Separate cash flow from total cost

A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.

Run conservative cases

Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.

Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.

How to Use

Enter original loan balance.
Enter interest rate %.
Enter original amortization years.
Enter years elapsed.
Enter lump-sum principal payment.
Read new payment and gap.

Frequently Asked Questions

What is a loan recast?

A loan recast re-amortizes the remaining balance over the remaining term after a principal prepayment. Unlike refinancing (which requires new loan, new appraisal, new fees), recasting simply applies a one-time lump-sum payment and recalculates the monthly payment based on the new balance. Typical recast fee: $200-500 (vs 2-3% of loan value for refinancing). Rate stays the same; only principal and payment change.

When does a recast make sense?

(1) Borrower comes into windfall (bonus, sale proceeds, inheritance) and wants to reduce monthly obligation without refinancing. (2) Borrower has accumulated principal paydown via extra payments and wants to crystallize into lower monthly. (3) Rate is low and refinancing would lose favorable rate. (4) Simple administrative move without credit re-review. Common in 30-year mortgages (allowed on conventional, not VA/FHA).

Recast vs refinance?

Recast: preserves rate, cheaper, simpler, no credit check. Refinance: can change rate (opportunity if rates dropped), can extract equity (cash-out), can change term (15 to 30 year or vice versa), more expensive, credit check required. If current rate is favorable and you just want lower payment, recast. If you want to extract equity or restructure term, refinance. Jumbo loans sometimes don't allow recast.

What's the payment math?

$500k original loan at 4% 30-year = $2,387/mo. After 5 years, balance ~$452k. Extra $100k prepayment reduces balance to $352k. Recast: $352k at 4% over remaining 25 years = $1,857/mo — $530/mo reduction. But total interest over 25 years also drops from $221k to $205k. Recast rearranges cash flow more than it reduces total interest — that's the tradeoff.